Bankrate: Mortgage Rates Bound Higher

NEW YORK, June 7 /PRNewswire-FirstCall/ -- Mortgage rates increased for the sixth consecutive week, with the average 30-year fixed mortgage rate hitting a 10-month high of 6.61 percent. According to Bankrate.com's weekly national survey of large lenders, the average 30-year fixed mortgage has an average of 0.26 discount and origination points.

The average 15-year fixed rate mortgage, popular for refinancing, increased by a similar amount, to 6.33 percent. With larger loans, the average jumbo 30-year fixed rate climbed to 6.86 percent. Even adjustable rate mortgages were in on the act, with the average one-year ARM rising to 6.17 percent and the 5/1 ARM jumping to 6.52 percent.

Mortgage rates continue to climb as strong economic data and the words of Fed Chairman Ben Bernanke made it clear that lower interest rates are not in the forecast. A strong employment report, coupled with upbeat readings on both the manufacturing and service sectors showed the economy isn't in need of an interest rate cut and were enough to raise inflation concerns. Chairman Bernanke reiterated that inflation remains the Fed's primary focus. As a result, yields on 10-year Treasury notes approached the 5 percent mark, taking mortgage rates higher as well. Mortgage rates are closely related to yields on long-term government bonds.

Fixed mortgage rates have increased nearly one-half percentage point since mid-March. At the time, the average 30-year fixed mortgage rate dipped to 6.16 percent, meaning that a $165,000 loan would have carried a monthly payment of $1,006.30. With the average 30-year fixed rate now 6.61 percent, the same loan originated today would carry a monthly payment of $1,054.88. Fixed mortgage rates still remain a compelling refinancing alternative for adjustable rate borrowers facing sharp payment adjustments.

                              SURVEY RESULTS

  30-year fixed: 6.61% -- up from 6.47% last week (avg. points: 0.26)
  15-year fixed: 6.33% -- up from 6.21% last week (avg. points: 0.25)
  5/1 ARM: 6.52% -- up from 6.37% last week (avg. points: 0.25)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/mortgagerates

About Bankrate, Inc.

Bankrate, Inc. (NASDAQ: RATE) owns and operates Bankrate.com, a leading Internet consumer banking marketplace. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. It is the leading aggregator of more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. In 2006, Bankrate.com had nearly 53 million unique visitors. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (NASDAQ: YHOO) , America Online (NYSE: TWX) , The Wall Street Journal (NYSE: DJ) and The New York Times (NYSE: NYT) . Bankrate.com's information is also distributed through more than 400 national and state publications. In addition to Bankrate.com, Bankrate, Inc. also owns and operates Bankrate Select, an internet lead aggregator and MMIS/Interest.com, which publishes mortgage guides and financial rates and information.

NOTE TO EDITORS: The information contained in this release is available for print or broadcast with attribution to Bankrate.com

   For more information contact:
   Kayleen Keneally
   Director, Corporate Communications
   kkeneally@bankrate.com
   917-368-8677